Econ 101

Housing Costs and “Bidenomics”

Published by Papa Giorgio

Democrats just accidently showed why “Bidenomics” is a failure… don’t even get me started on the border, energy policy, etc

…The combination of higher home prices and higher interest rates has broken America’s housing market. Since Mr. Biden became president, the median home price has jumped over 27%, and interest rates have risen from 2.8% to 7.2%.

Those two factors have caused the monthly mortgage payment on a median-priced home to more than double, from $979 to $2,075.

That’s costing a family more than $13,000 extra per year for the same house. This has forced many Americans to rent instead, and the increased demand for apartments has driven rents to record highs….

(HERITAGE)

ISSUES & INSIGHTS joins the beat down!

….Of course, this doesn’t count the fact that Americans have to squeeze this spending out of a 4% decline in real average weekly earnings since Christmas 2020. Or, to put it another way, Bidenflation costs the typical family $11,400 a year.

Which is why more than one in three Americans say they are skipping Christmas presents due to inflation concerns.

Is it any wonder, then, that as the Bidens frolic – while lecturing Americans that all is well – food prices, our ability to pay our bills, housing affordability, gasoline prices and overall inflation, are the top five economic issues in the latest TIPP poll?

Most families this year will probably feel less like costumed tap dancers and more like poor Mrs. Cratchit from “A Christmas Carol.”

Imagine the scene. Bob Cratchit raises his glass after the family’s Christmas dinner to toast President Joe Biden, and says, mimicking White House talking points:

“To Mr. Biden! The Founder of the Feast!”

To which Mrs. Cratchit replies: “The Founder of the Feast indeed! I wish I had him here. I’d give him a piece of my mind to feast upon, and I hope he’d have a good appetite for it.”…

Homeless Policies vs. Small Businesses | Armstrong & Getty

Published by Papa Giorgio

Armstrong and Getty read from a good New York Times piece titled: “A Sandwich Shop, a Tent City and an American Crisis: As homelessness overwhelms downtown Phoenix, a small business wonders how long it can hang on” — Here is the link to the NYT’s article itself — Here is a PDF version of it.

Trickle Down Economics: The Impact of Government Interference

Published by Papa Giorgio

This is really a story about a GOVERNMENT INDUCED SHIT SHOW. The artificial inflation of a segment of the market that will “trickle-down” (so-to-speak) to many aspects of our lives. And so, with billions given to EV production from the Inflation Reduction Act will accomplish the exact opposite of what the Democrats promised it would do. Of course we all knew this, I am just pointing out the EV connection. As one article notes below,

  • The automakers are still healing from the chip shortage, which we talked about in one of our previous articles: Chip Shortage Puts a Brake on Automotive Production. They are now faced with lithium supply constraints which are not expected to ease down for a couple of years. And then there is also a looming threat of a shortage of other minerals such as graphite, nickel, cobalt, etc., which are also critical for the production of EV components.

It will take years for economists to sift through the wreckage of Big-Government edicts and messianic proclamations to “save the planet.” For now, all I can do is sound the alarm bells, in my own corner of the WWW.

QUOTE w/MEDIA

This is a FLASHBACK that originally aired on the radio Jul 2, 2013. Dennis Prager interviews George Gilder about his new book, “Knowledge and Power: The Information Theory of Capitalism and How it is Revolutionizing our World.” I found this small bit on Dodd-Frank interesting as it leads to government interference creating a business atmosphere that nets zero information — or — creativity, entrepreneurial investment, or new growth and business.

  • “A fundamental principle of information theory is that you can’t guarantee outcomes… in order for an experiment to yield knowledge, it has to be able to fail. If you have guaranteed experiments, you have zero knowledge” | George Gilder (The Fuller Interview Is Here)

EDITOR’S NOTE: this is how the USSR ended up with warehouses FULL of “widgets” (things made that it could not use or people did not want) no one needed in the real world. This economic law enforcers George Gilder’s contention that when government supports a venture from failing, no information is gained in knowing if the program actually works. Only the free-market can do this.

Why the posting of this key idea, or, rightly called an economic law. There are two stories I wish to share that brought me to think about this old audio I uploaded to my YouTube, and just fixed and reuploaded to my RUMBLE.

STORY 1

US to Give Automakers, Suppliers $12B to Produce EVs

The United States is making $12 billion available in grants and loans for automakers and suppliers to retrofit their plants to produce electric and other advanced vehicles, Energy Secretary Jennifer Granholm told reporters Thursday.

The Biden administration will also offer $3.5 billion in funding to domestic battery manufacturers, Granholm said.

For the advanced vehicles, $2 billion of the funding will come from the Inflation Reduction Act which Democrats passed last year, and $10 billion will come from the Energy Department’s Loans Program Office, Granholm said…….

STORY 2

U.S. EV Share Goes Flat At 7.1% Through June As Gas Autos Return

EV share of the new-vehicle market flattened out at 7.1 percent across the first half of the year after growing steadily in 2021 and 2022, according to U.S. new-vehicle registration data from Experian.

Is the party over? Hardly.

But in the fast-growing U.S. market of the moment, as microchip supplies improve and the production of popular gasoline-engine autos returns in force this summer, EVs are no longer outpacing the rest of the car business — at least for now…..

ALSO:

  • EVs sat at dealerships for an average of 92 days in the second quarter of 2023 versus 36 days for the same period in 2022. (U.S. NEWS and WORLD REPORT)

However, the push by governments to replace fossil fuels will increase production of these EV vehicles, reducing inflation will be impossible as prices of all sorts of items will greatly increase. 2-billion wasted and doing just the opposite of what Democrats say it would do.

The below articles will deal primarily with Nickel, but the overuse of this material as well as others in battery production due to this artificial inflation by governments will create interference in knowledge to be produced allowing the market [people] to make choices based on supply and demand.

What this means is that a shit show will trickle-down the supply chain. To the cost of stainless steel, to other ingredients key to electronics and all batteries. In other words,

A GOVERNMENT INDUCED SHIT SHOW HAS BEGUN

NATIONAL SECURITY  (Sino-Russian)

Global Nickel Mining Industry – Statistics & Facts

Nickel is a chemical element and a transition metal. It is mostly used for high-grade steel manufacturing, and increasingly so, in batteries. Global production of nickel from mines was estimated to amount to a total of 3.3 million metric tons in 2022. The major countries in nickel mining include Indonesia, Philippines, Russia, and New Caledonia. Home to the world’s two largest nickel mines based on production in 2022 was Russia, with the Kola MMC Mine’s production amounting to 151,030 metric tons and the Sorowako Mine producing 77,270 metric tons of nickel. Indonesia has the largest reserves of nickel, tied with Australia, and followed by and Brazil in third place. Interestingly, nickel reserves are among the metals and minerals with the least remaining life years, however, because nickel is a highly recyclable material, this poses less of a problem.

Nickel Mining Companies

The leading companies based on nickel production worldwide as of 2022 were Tsingshan Group and Delong from China, Nornickel from Russia, and Jinchuan Group from Hong Kong [China]. Tsingshan Group alone accounted for a 20 percent share of global nickel production that year. The world’s leading nickel producing companies based on market capitalization as of July 2023, however, were a different cohort: BHP from Australia had the leading market cap, at 155.2 billion U.S. dollars. The Brazilian company Vale came in second, with a market cap of nearly 62 billion U.S. dollars…..

Russia and China Unveil a Pact Against America and the West

In a sweeping long-term agreement, Vladimir Putin and Xi Jinping, the two most powerful autocrats, challenge the current political and military order.

n their matching mauve ties, Russia’s Vladimir Putin and China’s Xi Jinping last week declared a “new era” in the global order and, at least in the short term, endorsed their respective territorial ambitions in Ukraine and Taiwan. The world’s two most powerful autocrats unveiled a sweeping long-term agreement that also challenges the United States as a global power, nato as a cornerstone of international security, and liberal democracy as a model for the world. “Friendship between the two States has no limits,” they vowed in the communiqué, released after the two leaders met on the eve of the Beijing Winter Olympics. “There are no ‘forbidden’ areas of cooperation.”

Agreements between Moscow and Beijing, including the Treaty of Friendship of 2001, have traditionally been laden with lofty, if vague, rhetoric that faded into forgotten history. But the new and detailed five-thousand-word agreement is more than a collection of the usual tropes, Robert Daly, the director of the Kissinger Institute on China and the United States, at the Wilson Center, in Washington, told me. Although it falls short of a formal alliance, like nato, the agreement reflects a more elaborate show of solidarity than anytime in the past. “This is a pledge to stand shoulder to shoulder against America and the West, ideologically as well as militarily,” Daly said. “This statement might be looked back on as the beginning of Cold War Two.” The timing and clarity of the communiqué—amid tensions on Russia’s border with Europe and China’s aggression around Taiwan—will “give historians the kind of specific event that they often focus on.”….

NICKEL SHORTAGE AND BATTERIES

Electric Vehicles And The Nickel Supply Conundrum: Opportunities And Challenges Ahead

…One of the key commodities to realizing this ambition is nickel. Unlike other battery materials such as cobalt and lithium, nickel is unique in not being primarily driven by global battery demand. About 70% of the world’s nickel production is consumed by the stainless steel sector, while batteries take up a modest 5%.

S&P Global Market Intelligence forecasts global primary nickel consumption to rebound year-on-year due to stainless steel capacity expansions in China and Indonesia. Demand outside China is expected to be the main driver of global growth in volume terms in 2022 and global consumption is forecasted to rise at a compound annual growth rate of about 7% between 2020 and 2025.

The battery sector’s nickel demand is also expected to accelerate substantially, with many predicting it to near 35% of total demand by the end of the decade….

Why An Electric Vehicle Battery Shortage Could Be a Big Problem

With more electric vehicle orders than ever, can our international supply chain keep up with the demand? Or can the U.S. constrict its own battery plants in time?

Consumers have never been more interested in electric cars  and climate change goals. But with automakers scrambling to produce more EVs than ever, we could be facing a problematic shortage in the near future.

Jerry, your favorite super car app, breaks down why the predicted lack of inventory could be much worse than the current computer chip shortage.

A Storm Is Brewing

With a looming battery shortage, carmakers are doubling down on mining raw battery materials like lithium, nickel, and cobalt. The shortage would affect not only sourcing materials but processing and building the actual batteries as well.

Some companies are taking battery manufacturing into their own hands and constructing exclusive battery plants.

Rivian Automotive Inc. Chief Executive RJ Scaringe said, “Put very simply, all the world’s cell production combined represents well under 10% of what we will need in 10 years,” according to Market Watch. Essentially, at least 90% of the necessary supply chain to keep up with demand does not exist.

…CNN notes that “the United States sources about 90% of the lithium it uses from Argentina and Chile, and contributes less than 1% of global production of nickel and cobalt, according to the Department of Energy. China refines  60% of the world’s lithium and 80% of the cobalt.”

No Ev Battery Plan For The Long-Term

We all know about Biden’s goal to ensure that at least half of all vehicles will be electric by 2030. We’re talking a $7.5 billion electric vehicle charging infrastructure. California even pledged that by 2035, all cars must be zero-emission vehicles.

Though the Biden administration has pushed for more EV production in the short term, there aren’t long-term plans pertaining to electric batteries. Did you know it can take at least seven to 10 years to set up a mine?

Unfortunately, the U.S. is very dependent on foreign countries that have the manufacturing capacity and raw materials that we don’t.

If for political reasons China shut down the world’s electric vehicle transition, what happens then? It’s also possible that China could restrict “exports of lithium hydroxide to give its domestic electric battery and vehicle manufacturers an advantage,” according to CNN.

As you can imagine, the price for critical battery metals has shot through the roof. According to CNN, “Some automakers like Tesla have made deals with suppliers of raw materials recently, which may help insulate them from shortages.”

If you’ve looked into buying an electric car recently, you’re very familiar with the federal tax credit awarded to EV car owners.

According to CNN, “The government has offered subsidies for electric vehicle purchases and charging infrastructure, but the mining sector hasn’t seen similar support, the battery metals experts say.”

[….]

Will Super-Sized EV Batteries Strain the Supply Chain?

Electric vehicle battery costs soared in 2022. But that doesn’t seem to have slowed the pace of automakers planning to adopt ever larger battery packs to satisfy ever-higher EV driving range claims.

As Bloomberg recently calculated, using EV models from the U.S., Europe, and China, the average pack size is now around 80 kwh, from in the vicinity of 40 kwh in 2018, and the growth trend is expected to continue for some years.

Meanwhile, average global EV range is now at 210 miles—up dramatically versus the average range of 143 miles in 2018.

That also means average EVs are less efficient, the byproduct of a shift to larger EVs.

EV driving range has been increasing at a rate of about 10% each year. Bloomberg sees the market finally reaching a ceiling in its demand for more range at 250-310 miles depending on the size of the EV, with the smallest city cars well below that range.

[….]

According to Bloomberg New Energy Finance, the Silverado EV’s pack, topping 200 kwh, represents $25,000 to $27,000 of direct cost to GM. That happens to be as much as a well-equipped 2024 Chevrolet Trax crossover, or a base 2024 Chevrolet Trailblazer SUV.

The Chevy Silverado EV won’t even have the biggest battery among full-size electric trucks. Ram plans a gigantic 229-kwh pack for its upcoming Ram 1500 REV.

The Silverado EV’s battery pack has more than twice the capacity versus that of the top Lucid Air that can go more than 500 miles on a charge. It’s also enough to power an average American house for almost three weeks, based on the U.S. Energy Information Administration’s 2021 household daily average of 10.632 kwh.

Ford isn’t going to go to 600 miles of range and thinks the sweet spot is around 350 miles. Mazda has said that long-range EVs aren’t the future…..

Behind the 2023 Surge in Battery Demand for EVs

Global sales of electric cars are set to surge to yet another record this year, expanding their share of the overall car market to close to one-fifth and leading a major transformation of the auto industry that has implications for the energy sector, especially oil. That’s according to the International Energy Agency’s (IEA) recent report, “Global EV Outlook, 2023”, accessible here [as a PDF], which, in its 142 pages, shines a bright light on the remarkable dynamics that have unfolded in the field of battery demand for Electric Vehicles (EVs). This gallery summarizes the IEA report to navigate six compelling sides of the industry’s transformative journey. It begins with a surge in battery demand for EVs, outlining how, in 2022, it soared by approximately 65%, reaching a colossal 550 GWh from 330 GWh in 2021. This growth, fueled by a 55% increase in electric passenger car registrations, is a global phenomenon, yet it finds its epicenter in China and the United States.

[….]

1. Battery demand by mode and region, 2016–2022:

IEA’s report states that the demand for lithium-ion (Li-ion) batteries in the automotive sector surged significantly in 2022, rising by approximately 65% to reach 550 GWh, up from about 330 GWh in 2021. This remarkable growth was primarily attributed to the increasing sales of electric passenger cars, which saw new registrations rise by 55% in 2022 compared to the previous year.

In China, the demand for batteries in the automotive industry experienced an even more substantial increase, exceeding 70%. This coincided with an 80% increase in electric car sales in 2022 compared to 2021. However, this upward trajectory in battery demand was somewhat tempered by the rising prevalence of Plug-in Hybrid Electric Vehicles (PHEVs).

Meanwhile, in the United States, the demand for vehicle batteries also witnessed robust growth, expanding by approximately 80%, even though electric car sales only saw a comparatively modest increase of around 55% in 2022 relative to the preceding year.

2. Overall supply and demand of battery metals by sector, 2016–2022

The surge in battery demand is spurring the need for essential materials. In 2022, there was still an imbalance between the demand for lithium and its supply, a situation that persisted from 2021. This discrepancy occurred despite a significant 180% rise in production since 2017.

This chart shows that in 2022, EV batteries accounted for approximately 60% of the demand for lithium, 30% for cobalt, and 10% for nickel. In contrast, just five years prior, in 2017, these proportions were roughly 15%, 10%, and 2%, respectively.

(READ THE REST! – Great Summary of larger report! Maria Guerra’s articles are now my first stop on this topic)

Electric Vehicle Industry Jittery over Looming Lithium Supply Shortage

The transition to Electric Vehicles (EVs) is picking pace with concentrated efforts to achieve the net-zero carbon scenario by 2050. The International Energy Agency (IEA) estimated that global EV sales reached 6.6 million units in 2021, nearly doubling from the previous year. IEA projects that the number of EVs in use (across all road transport modes excluding two/three-wheelers) is expected to increase from 18 million vehicles in 2021 to 200 million vehicles by 2030, recording an average annual growth of over 30%. The estimation is based on policies announced by governments around the world as of mid-2021. This scenario will result in a sixfold increase in the demand for lithium, a key material used in the manufacturing of EV batteries, by 2030. With increasing EV demand, the industry looks to navigate through the lithium supply disruptions.

Lithium Supply Shortages Are Not Going Away Soon

The global EV market is already struggling with lithium supply constraints. Both lithium carbonate (Li2CO3) and lithium hydroxide (LiOH) are used for the production of EV batteries, but traditionally lithium hydroxide is obtained from processing of lithium carbonate, so the industry is more watchful of lithium carbonate production. BloombergNEF, a commodity market research provider, indicated that the production of lithium carbonate equivalent (LCE) was estimated to reach around 673,000 tons in 2022, while the demand was projected to exceed 676,000 tons LCE. In January 2023, a leading lithium producer, Albemarle, indicated that the global demand for LCE would expand to 1.8 million metric tons (MMt) (~1.98 million tons) by 2025 and 3.7 MMt (~4 million tons) by 2030. Meanwhile, the supply of LCE is expected to reach 2.9 MMt (~3.2 million tons) by 2030, creating a huge deficit.

There is a need to scale up lithium mining and processing. IEA indicates that about 50 new average-sized mines need to be built to fulfill the rising lithium demand. Lithium as a resource is not scarce; as per the US Geological Survey estimates, the global lithium reserves stand at about 22 million tons, enough to sustain the demand for EVs far in the future.

However, the process of mining and refining the metal is time-consuming and not keeping up pace with the surging demand. As per IEA analysis, between 2010 and 2019, the lithium mines that started production took an average of 16.5 years to develop. Thus, lithium production is not likely to shoot up drastically in a short period of time.

Considering the challenges in increasing the lithium production output, industry stakeholders across the EV value chain are racing to prepare for the anticipated supply chain disruptions.

[….]

The automakers are still healing from the chip shortage, which we talked about in one of our previous articles: Chip Shortage Puts a Brake on Automotive Production. They are now faced with lithium supply constraints which are not expected to ease down for a couple of years. And then there is also a looming threat of a shortage of other minerals such as graphite, nickel, cobalt, etc., which are also critical for the production of EV components. While the world is determined and excited about the EV revolution, the transition is going to be challenging.

So challenging in fact that GOOGLE years ago admitted the problem:

We came to the conclusion that even if Google and others had led the way toward a wholesale adoption of renewable energy, that switch would not have resulted in significant reductions of carbon dioxide emissions. Trying to combat climate change exclusively with today’s renewable energy technologies simply won’t work; we need a fundamentally different approach.

[…..]

“Even if one were to electrify all of transport, industry, heating and so on, so much renewable generation and balancing/storage equipment would be needed to power it that astronomical new requirements for steel, concrete, copper, glass, carbon fibre, neodymium, shipping and haulage etc etc would appear. All these things are made using mammoth amounts of energy: far from achieving massive energy savings, which most plans for a renewables future rely on implicitly, we would wind up needing far more energy, which would mean even more vast renewables farms – and even more materials and energy to make and maintain them and so on. The scale of the building would be like nothing ever attempted by the human race.”

Google Joins the Common Sense Crew On Renewable Energies ~ Finally! (RPT)

Global Lithium Shortage Could Severely Impact EV Makers In 2025

Here’s what could happen if demand outstrips supply.

The automotive industry could be in for a shock, with a new report predicting that a lithium shortage is on the horizon. Citing BMI, a research unit of Fitch Solutions, CNBC reports that by 2025, demand will outstrip supply. The BMI report puts this down to China’s soaring appetite for the alkali metal.

“We expect an average of 20.4% year-on-year annual growth for China’s lithium demand for EVs alone over 2023-2032,” reads the report. Lithium is an essential component in electric vehicle batteries. It is used in most battery packs, including those found in popular vehicles such as the Tesla Model S. According to Euronews, the electric sedan uses approximately 26 pounds of lithium in its battery pack.

While China’s lithium demand will increase by 20.4% year-on-year, the country’s supply will only grow by 6% over the same time. It’s worth noting that China is the world’s third-largest lithium producer after Australia and Chile…..

Rand Paul Invokes Davy Crockett | Not Yours to Give

Published by Papa Giorgio

Rand Paul quotes Essay from 1867 Harper magazine ‘Not Yours To Give’ Davy Crockett.

David Crockett (August 17, 1786 – March 6, 1836) was an American folk hero, frontiersman, soldier, and politician. He is commonly referred to in popular culture by the epithet “King of the Wild Frontier”. He represented Tennessee in the U.S. House of Representatives and served in the Texas Revolution.

The MISES INSTITUTE has a cataloging of this story from The Life of Colonel David Crockett, compiled by Edward S. Ellis (Philadelphia: Porter & Coates, 1884). Included in Free Market Economics: A Basic Reader, compiled by Bettina B. Greaves (Irvington-on-Hudson, NY: Foundation for Economic Education, 1975). See also the MACKINAC CENTER.

One day in the House of Representatives, a bill was taken up appropriating money for the benefit of a widow of a distinguished naval officer. Several beautiful speeches had been made in its support. The Speaker was just about to put the question when Davy Crockett arose:

“Mr. Speaker—I have as much respect for the memory of the deceased, and as much sympathy for the sufferings of the living, if suffering there be, as any man in this House, but we must not permit our respect for the dead or our sympathy for a part of the living to lead us into an act of injustice to the balance of the living. I will not go into an argument to prove that Congress has no power to appropriate this money as an act of charity. Every member upon this floor knows it. We have the right, as individuals, to give away as much of our own money as we please in charity; but as members of Congress we have no right so to appropriate a dollar of the public money. Some eloquent appeals have been made to us upon the ground that it is a debt due the deceased. Mr. Speaker, the deceased lived long after the close of the war; he was in office to the day of his death, and I have never heard that the government was in arrears to him.

“Every man in this House knows it is not a debt. We cannot, without the grossest corruption, appropriate this money as the payment of a debt. We have not the semblance of authority to appropriate it as a charity. Mr. Speaker, I have said we have the right to give as much money of our own as we please. I am the poorest man on this floor. I cannot vote for this bill, but I will give one week’s pay to the object, and if every member of Congress will do the same, it will amount to more than the bill asks.”

He took his seat. Nobody replied. The bill was put upon its passage, and, instead of passing unanimously, as was generally supposed, and as, no doubt, it would, but for that speech, it received but few votes, and, of course, was lost.

Later, when asked by a friend why he had opposed the appropriation, Crockett gave this explanation:

“Several years ago I was one evening standing on the steps of the Capitol with some other members of Congress, when our attention was attracted by a great light over in Georgetown. It was evidently a large fire. We jumped into a hack and drove over as fast as we could. In spite of all that could be done, many houses were burned and many families made homeless, and, besides, some of them had lost all but the clothes they had on. The weather was very cold, and when I saw so many women and children suffering, I felt that something ought to be done for them. The next morning a bill was introduced appropriating $20,000 for their relief. We put aside all other business and rushed it through as soon as it could be done.

“The next summer, when it began to be time to think about the election, I concluded I would take a scout around among the boys of my district. I had no opposition there, but, as the election was some time off, I did not know what might turn up. When riding one day in a part of my district in which I was more of a stranger than any other, I saw a man in a field plowing and coming toward the road. I gauged my gait so that we should meet as he came to the fence. As he came up, I spoke to the man. He replied politely, but, as I thought, rather coldly.

“I began: ‘Well, friend, I am one of those unfortunate beings called candidates, and—’

“‘Yes, I know you; you are Colonel Crockett, I have seen you once before, and voted for you the last time you were elected. I suppose you are out electioneering now, but you had better not waste your time or mine. I shall not vote for you again.’

“This was a sockdolager…I begged him to tell me what was the matter.

“‘Well, Colonel, it is hardly worth-while to waste time or words upon it. I do not see how it can be mended, but you gave a vote last winter which shows that either you have not capacity to understand the Constitution, or that you are wanting in the honesty and firmness to be guided by it. In either case you are not the man to represent me. But I beg your pardon for expressing it in that way. I did not intend to avail myself of the privilege of the constituent to speak plainly to a candidate for the purpose of insulting or wounding you. I intend by it only to say that your understanding of the Constitution is very different from mine; and I will say to you what, but for my rudeness, I should not have said, that I believe you to be honest….But an understanding of the Constitution different from mine I cannot overlook, because the Constitution, to be worth anything, must be held sacred, and rigidly observed in all its provisions. The man who wields power and misinterprets it is the more dangerous the more honest he is.’

“‘I admit the truth of all you say, but there must be some mistake about it, for I do not remember that I gave any vote last winter upon any constitutional question.’

“‘No, Colonel, there’s no mistake. Though I live here in the backwoods and seldom go from home, I take the papers from Washington and read very carefully all the proceedings of Congress. My papers say that last winter you voted for a bill to appropriate $20,000 to some sufferers by a fire in Georgetown. Is that true?’

“‘Well, my friend; I may as well own up. You have got me there. But certainly nobody will complain that a great and rich country like ours should give the insignificant sum of $20,000 to relieve its suffering women and children, particularly with a full and overflowing Treasury, and I am sure, if you had been there, you would have done just as I did.’

“‘It is not the amount, Colonel, that I complain of; it is the principle. In the first place, the government ought to have in the Treasury no more than enough for its legitimate purposes. But that has nothing to do with the question. The power of collecting and disbursing money at pleasure is the most dangerous power that can be intrusted to man, particularly under our system of collecting revenue by a tariff, which reaches every man in the country, no matter how poor he may be, and the poorer he is the more he pays in proportion to his means. What is worse, it presses upon him without his knowledge where the weight centers, for there is not a man in the United States who can ever guess how much he pays to the government. So you see, that while you are contributing to relieve one, you are drawing it from thousands who are even worse off than he. If you had the right to give anything, the amount was simply a matter of discretion with you, and you had as much right to give $20,000,000 as $20,000. If you have the right to give to one, you have the right to give to all; and, as the Constitution neither defines charity nor stipulates the amount, you are at liberty to give to any and everything which you may believe, or profess to believe, is a charity, and to any amount you may think proper. You will very easily perceive what a wide door this would open for fraud and corruption and favoritism, on the one hand, and for robbing the people on the other. No, Colonel, Congress has no right to give charity. Individual members may give as much of their own money as they please, but they have no right to touch a dollar of the public money for that purpose. If twice as many houses had been burned in this county as in Georgetown, neither you nor any other member of Congress would have thought of appropriating a dollar for our relief. There are about two hundred and forty members of Congress. If they had shown their sympathy for the sufferers by contributing each one week’s pay, it would have made over $13,000. There are plenty of wealthy men in and around Washington who could have given $20,000 without depriving themselves of even a luxury of life. The congressmen chose to keep their own money, which, if reports be true, some of them spend not very creditably; and the people about Washington, no doubt, applauded you for relieving them from the necessity of giving by giving what was not yours to give. The people have delegated to Congress, by the Constitution, the power to do certain things. To do these, it is authorized to collect and pay moneys, and for nothing else. Everything beyond this is usurpation, and a violation of the Constitution.

“‘So you see, Colonel, you have violated the Constitution in what I consider a vital point. It is a precedent fraught with danger to the country, for when Congress once begins to stretch its power beyond the limits of the Constitution, there is no limit to it, and no security for the people. I have no doubt you acted honestly, but that does not make it any better, except as far as you are personally concerned, and you see that I cannot vote for you.’

“I tell you I felt streaked. I saw if I should have opposition, and this man should go to talking, he would set others to talking, and in that district I was a gone fawn-skin. I could not answer him, and the fact is, I was so fully convinced that he was right, I did not want to. But I must satisfy him, and I said to him:

“‘Well, my friend, you hit the nail upon the head when you said I had not sense enough to understand the Constitution. I intended to be guided by it, and thought I had studied it fully. I have heard many speeches in Congress about the powers of Congress, but what you have said here at your plow has got more hard, sound sense in it than all the fine speeches I ever heard. If I had ever taken the view of it that you have, I would have put my head into the fire before I would have given that vote; and if you will forgive me and vote for me again, if I ever vote for another unconstitutional law I wish I may be shot.’

“He laughingly replied: ‘Yes, Colonel, you have sworn to that once before, but I will trust you again upon one condition. You say that you are convinced that your vote was wrong. Your acknowledgment of it will do more good than beating you for it. If, as you go around the district, you will tell people about this vote, and that you are satisfied it was wrong, I will not only vote for you, but will do what I can to keep down opposition, and, perhaps, I may exert some little influence in that way.’

“‘If I don’t,’ said I, ‘I wish I may be shot; and to convince you that I am in earnest in what I say I will come back this way in a week or ten days, and if you will get up a gathering of the people, I will make a speech to them. Get up a barbecue, and I will pay for it.’

“‘No, Colonel, we are not rich people in this section, but we have plenty of provisions to contribute for a barbecue, and some to spare for those who have none. The push of crops will be over in a few days, and we can then afford a day for a barbecue. This is Thursday; I will see to getting it up on Saturday week. Come to my house on Friday, and we will go together, and I promise you a very respectable crowd to see and hear you.’

“‘Well, I will be here. But one thing more before I say good-by. I must know your name.’

“‘My name is Bunce.’

“‘Not Horatio Bunce?’

“‘Yes.’

“‘Well, Mr. Bunce, I never saw you before, though you say you have seen me, but I know you very well. I am glad I have met you, and very proud that I may hope to have you for my friend.’

“It was one of the luckiest hits of my life that I met him. He mingled but little with the public, but was widely known for his remarkable intelligence and incorruptible integrity, and for a heart brimful and running over with kindness and benevolence, which showed themselves not only in words but in acts. He was the oracle of the whole country around him, and his fame had extended far beyond the circle of his immediate acquaintance. Though I had never met him before, I had heard much of him, and but for this meeting it is very likely I should have had opposition, and had been beaten. One thing is very certain, no man could now stand up in that district under such a vote.

“At the appointed time I was at his house, having told our conversation to every crowd I had met, and to every man I stayed all night with, and I found that it gave the people an interest and a confidence in me stronger than I had every seen manifested before.

“Though I was considerably fatigued when I reached his house, and, under ordinary circumstances, should have gone early to bed, I kept him up until midnight, talking about the principles and affairs of government, and got more real, true knowledge of them than I had got all my life before.

“I have known and seen much of him since, for I respect him—no, that is not the word—I reverence and love him more than any living man, and I go to see him two or three times every year; and I will tell you, sir, if every one who professes to be a Christian lived and acted and enjoyed it as he does, the religion of Christ would take the world by storm.

“But to return to my story. The next morning we went to the barbecue, and, to my surprise, found about a thousand men there. I met a good many whom I had not known before, and they and my friend introduced me around until I had got pretty well acquainted—at least, they all knew me.

“In due time notice was given that I would speak to them. They gathered up around a stand that had been erected. I opened my speech by saying:

“‘Fellow-citizens—I present myself before you today feeling like a new man. My eyes have lately been opened to truths which ignorance or prejudice, or both, had heretofore hidden from my view. I feel that I can today offer you the ability to render you more valuable service than I have ever been able to render before. I am here today more for the purpose of acknowledging my error than to seek your votes. That I should make this acknowledgment is due to myself as well as to you. Whether you will vote for me is a matter for your consideration only.’

“I went on to tell them about the fire and my vote for the appropriation and then told them why I was satisfied it was wrong. I closed by saying:

“‘And now, fellow-citizens, it remains only for me to tell you that the most of the speech you have listened to with so much interest was simply a repetition of the arguments by which your neighbor, Mr. Bunce, convinced me of my error.

“‘It is the best speech I ever made in my life, but he is entitled to the credit for it. And now I hope he is satisfied with his convert and that he will get up here and tell you so.’

“He came upon the stand and said:

“‘Fellow-citizens—It affords me great pleasure to comply with the request of Colonel Crockett. I have always considered him a thoroughly honest man, and I am satisfied that he will faithfully perform all that he has promised you today.’

“He went down, and there went up from that crowd such a shout for Davy Crockett as his name never called forth before.

“I am not much given to tears, but I was taken with a choking then and felt some big drops rolling down my cheeks. And I tell you now that the remembrance of those few words spoken by such a man, and the honest, hearty shout they produced, is worth more to me than all the honors I have received and all the reputation I have ever made, or ever shall make, as a member of Congress.

“Now, sir,” concluded Crockett, “you know why I made that speech yesterday.

“There is one thing now to which I will call your attention. You remember that I proposed to give a week’s pay. There are in that House many very wealthy men—men who think nothing of spending a week’s pay, or a dozen of them, for a dinner or a wine party when they have something to accomplish by it. Some of those same men made beautiful speeches upon the great debt of gratitude which the country owed the deceased—a debt which could not be paid by money—and the insignificance and worthlessness of money, particularly so insignificant a sum as $10,000, when weighted against the honor of the nation. Yet not one of them responded to my proposition. Money with them is nothing but trash when it is to come out of the people. But it is the one great thing for which most of them are striving, and many of them sacrifice honor, integrity, and justice to obtain it.”

Disparity Doesn’t Necessarily Imply Racism (Prager Reads Fryer)

Published by Papa Giorgio

Link to the WALL STREET JOURNAL found at the Manhattan Institute. I actually joined the “pay wall” at WSJ because they have a $1 a week for a year deal… just because of this article.

Here is the article:

  • Today it’s more often the result of skills gaps than discrimination. That’s something every black student needs to know.

I was raised, in part, by my paternal grandmother—a phenomenal black woman born in 1925 who came of age during Jim Crow, attended Bethune-Cookman University in the early 1940s, and experienced both the promise and limitations of the civil-rights era when integrating schools in Florida in 1969. She did her best to teach sixth-graders subject-verb agreement minutes after being spat on by their parents. Her life’s journey provided unlimited content as we sat together for nearly three decades, stuck to the plastic slipcovers on her sofa, playing cards, drinking sweet tea, and talking uninhibitedly about race in America.

The first discussion I can remember happened in 1988, when I was 11, after a visit to McDonald’s. After ordering, my grandmother paid with a crisp $20 bill from her pocketbook, and the cashier put the change directly on the counter. When we got to the parking lot, she was incensed. “You see that? White woman didn’t want to touch me.” I had noticed it too, but thought the cashier was being nice, trying to avoid passing on her own germs.

My grandmother—no doubt based in part on her experiences—saw racism everywhere, in every inequity, every statistic. Racial differences in wages? Racism. Racial differences in educational achievement? Racism. Racial differences in teen birth rates? Racism. This sort of casual empiricism—which has crept back into mainstream media and other institutions—was a competitive sport among my family and friends. Did you see the way that white woman tightened her grip on her purse, because I was behind her? Does this guy follow everyone around the store?

A decade after the McDonald’s incident, in graduate school, I read a 1995 paper titled “The Role of Premarket Factors in Black-White Wage Differences.” Using a nationally representative sample of more than 12,000 14- to 17-year-olds from 1979, Derek A. Neal and William R. Johnson estimated that blacks earned between 35% to 45% less than whites on average.

They examined how much of the wage gap could be attributed to present-day discrimination in the workplace versus differences in skill as measured by the Armed Forces Qualification Test, a cousin of the ACT and SAT. Importantly, they weren’t trying to measure the effect of America’s racist history running back to the early 17th century, when the first African slaves were brought to work the tobacco farms of Virginia, only the extent to which blacks earn lower incomes because employers today make racially discriminatory decisions. Nor did they focus on prejudice more broadly: They ignored that my grandmother was spat on in the parking lot at work and concentrated on whether she was treated fairly once she entered the building.

“We find,” they wrote in the abstract of their paper, “that this one test score explains all of the black-white wage gap for young women and much of the gap for young men.” With their approach, antiblack bias played no role in the divergent wages among women; a black woman with the same qualifications as a white woman made slightly more money. And it accounted for at most 29% of the racial difference among men, with 71% traceable to disparate performance on the AFQT. The AFQT itself was evaluated by the Pentagon, which found that black and white military recruits with similar AFQT scores performed similarly on the job—indicating no racial bias.

The paper felt like an attack on what I knew. An assault on all those conversations with my grandmother, which taught me that racism—present-tense racism—dictated black-white inequality. I told myself that Messrs. Neal and Johnson, both of whom were white, were probably bigots, and I set out on a mission to disprove their work.

I vented about my battle with Messrs. Neal and Johnson to a fellow graduate student at Penn State, a white guy from the cornfields of Southern Illinois. He was no more at home at a top-25 economics doctoral program than I was, and we spent a fair amount of time together during our first year, staring at Euler equations in our favorite textbook, “Recursive Methods in Economic Dynamics.”

I told him I was sure discrimination was a bigger factor than Messrs. Neal and Johnson were letting on, but “I just can’t get this data to cooperate.” He asked why I was so convinced, and I erupted in a rant about the prevalence of racism and recognizing bigots on sight. My grandmother would’ve nodded rhythmically along. My friend responded with a burst of loud, sharp laughter in my face.

He pointed out how far I was straying from our Euler equations. How on any subject other than race, I would have never given in to such sloppy thinking. The double identity—a classically trained economist taught to tease out causal relationships and a black Southern boy taught that discrimination is ubiquitous—had lived seamlessly inside me until that moment. Messrs. Neal and Johnson, as it turns out, aren’t bigots, and their conclusions have stood the test of time and my attempts to disprove them. I extended their analysis to unemployment, teen pregnancy, incarceration and other outcomes—all of which follow the same pattern. Moreover, the relationship between skills and wages has been confirmed by study after study, even when using different data and methods. Kevin Lang, an economist at Boston University, corrects important issues in Messrs. Neal and Johnson’s work but finds the same relationship between AFQT scores and wages. Taken together, an honest review of the evidence suggests that current racial inequities are more a result of differences in skill than differences in treatment of those with the same skill.

I write this with some degree of trepidation, in part because I still have my grandmother in my ear and in part because I am keenly aware of the harm in underestimating bias. But there is also a cost to overemphasizing its impact. A black kid who believes he will face daunting societal obstacles is likely to underinvest in trying to climb society’s rungs. Every black student in the country needs to know that his return on investment in education is, if anything, higher than for white students.

The solution is neither to stop fighting biased behavior nor to curb honest inquiry about race in America. We shouldn’t stop searching for and penalizing discriminatory employers, or trying to reduce racial differences in police brutality, or estimating whether the value of a home appraisal depends on the race of the homeowner, or reducing bias in bail decisions by using artificial intelligence. I could go on, like the conversations stuck to those slipcovers. The solution isn’t to look away from discrimination. It does exist. But we also can’t point at every gap in outcomes and instantly conclude it’s racism. Prejudice must be measured rigorously. Statistically. Disparity doesn’t necessarily imply racism. It may feel omnipresent, but it isn’t all-powerful. Skills matter most.

Mr. Fryer is a professor of economics at Harvard, a fellow at the Manhattan Institute, and founder of Equal Opportunity Ventures.

Quantitative Easing

Published by Papa Giorgio

(Originally posted July 2017 – updated with the below video) On this episode of Common Sense Soapbox, Florida Man leads the crew via gator to a Federal Reserve branch in Miami. Upon the marble steps, Seamus engages the crew in a brief lecture about the function — and dysfunction — of The Fed.

Question, or Statement Often Made by Democrats

  • “The stock market relies on confidence, and the stock market has done incredibly well since Obama took over. How do you explain that?”

Click to Enlarge

(This is with thanks to GAY PATRIOT and the graph from ZERO HEDGE) Here is GAY PATRIOT’S summary: Fed pumping gobs of money into Wall Street? Market drifts upward. Fed stops pumping? Market doesn’t. The so-called “confidence” is drug-induced.

Credit Writedowns touches on this a bit:

…As for Bill Gross, he also said that the Federal Reserve knows that its easy money policies have a negative impact: “There are ultimately and presently negatives to these policies. The chairman recognizes that.”

[….]

On how to get out of the quantitative easing scenario that we’ve been in for so long:

“That’s very difficult, not just for the Fed, but other for other central banks. at the moment, the bank of japan is about to enter the pool, so to speak, the deep end. The Bank of England as well, perhaps, with carney indicating as much. Is it easy to get out of the deep end once you get into it? It gets difficult, because the market begins expects a constant infusion of liquidity–$85 billion a month into the bond market, which extends out into high-yield and equity credit as we move forward. Once you cut off the check writing and the purse strings, it becomes a problematic question in terms of valuation and the ability of markets, stocks, and bonds to continue on.”

On his tweet on 2/20 saying that bond vigilantes are no more and central bankers are the masters of the universe:

“They are trying to let us know that they are vigilant. We saw the minutes yesterday and they were extensive and they meet every other month or more frequently. Are they vigilant? They are in terms of their objectives. what the fed is trying to do is reflate the economy, that means not only produce 2 to 3 to 4% real growth, but a modicum of inflation in combination such so we have a nominal 5% of GDP environment. Are they vigilant in terms of moving towards that goal? Yes. Will they be vigilant in terms of having reached it then pulling back and not disrupting markets? Perhaps not. We’ll have to see going forward.”

Above video description:

When Ben Bernanke announced that the Federal Reserve’s Open Market Committee was going to continue its monetary expansion program it calls Quantitative Easing, almost everyone in the financial media was taken by complete surprise. According to the mainstream media, the non-taper “surprised almost everyone out there.” Well it did not surprise me, nor anyone who had been paying attention to what I had been saying. As I said repeatedly over the past several months, the Fed knows that the appearance of economic health would evaporate if its stimulus were withdrawn, or even diminished. The Fed understands, as the market seems not to, that the current “recovery” could not survive without the continuation of massive monetary stimulus. In fact, the Fed’s next big move will likely be to increase, rather than taper, its monthly QE dosage! One reporter on this video said that its time for the Fed to take the training wheels off the economy. As I have been saying for years, QE is not the training wheels, its the only wheels the economy has. Take it away and the economy stalls. However, as the economy is now headed toward a cliff, taking the wheels off is much better than leaving them on and going over that cliff.

For more on how I knew the Fed wouldn’t taper, here’s an op-ed I released after the decision was announced.

Listen to The Peter Schiff Show
Live Weekdays 10am to noon ET on http://www.SchiffRadio.com

Friend me on http://www.Facebook.com/PeterSchiff
Follow me on http://www.Twitter.com/PeterSchiff

HOTAIR:

  • ….Until recently, the US had a coalition of allies at the G-20 to stand firm against the manipulation of the yuan. However, much to Barack Obama’s shock, they’re not as interested in scolding China for manipulating its currency while the Obama administration has done the same with its second round of “quantitative easing”….

THE BLAZE:

WASHINGTON TIMES:

[….]

Many currency analysts agree with Mr. Obama that the U.S. dollar stands to gain in coming months against the euro and Japanese yen, in particular, if the Fed is successful and the U.S. recovery picks up speed.

Nick Bennenbroek, analyst with Wells Fargo Securities, said the dollar actually has strengthened since the Fed’s announcement last week because, in an “ironic twist,” the economy has been showing unexpected strength. A report on Friday showed the best private job growth since April.

“Moreover, with the initial Fed announcement now out of the way, markets have refocused their attention on the ongoing European debt-market difficulties and, in particular, concerns over the state of the Irish government’s finances,” Mr. Bennenbroek said. The result is the euro may be due for a decline against the dollar.

But the Fed’s move only seemed to provide an excuse to many nations to dig in and further resist Mr. Obama’s call to curb global trade imbalances, starting with the massive Chinese trade deficit with the United States.

A Commerce Department report on Wednesday showed that the U.S. deficit with China fell $2.2 billion to $27.8 billion in September but remained near record highs. The U.S. blames the deficit in part on China’s currency policy, which makes Chinese imports cheaper in the United States.

But Chinese President Hu Jintao, ahead of a scheduled meeting with Mr. Obama on Thursday, called on other countries to “face their own problems” rather than cast blame for their giant trade imbalances on China. Mr. Hu also defended China’s currency controls as a boon to the world economy.

…(read more)…

Does The Bible Say All Conservatives Are Going To Hell?

Published by Papa Giorgio

So I had a cousin (wife’s side) mention a conversation and wanted me to join it. Here is the starter of the convo by his friend:

Here are the verses:

31 “When the Son of Man comes in His glory, and all the [c]holy angels with Him, then He will sit on the throne of His glory.

32 All the nations will be gathered before Him, and He will separate them one from another, as a shepherd divides his sheep from the goats.

33 And He will set the sheep on His right hand, but the goats on the left.

34 Then the King will say to those on His right hand, ‘Come, you blessed of My Father, inherit the kingdom prepared for you from the foundation of the world:

35 for I was hungry and you gave Me food; I was thirsty and you gave Me drink; I was a stranger and you took Me in;

36 I was naked and you clothed Me; I was sick and you visited Me; I was in prison and you came to Me.’

37 “Then the righteous will answer Him, saying, ‘Lord, when did we see You hungry and feed You, or thirsty and give You drink?

38 When did we see You a stranger and take You in, or naked and clothe You?

39 Or when did we see You sick, or in prison, and come to You?’

40 And the King will answer and say to them, ‘Assuredly, I say to you, inasmuch as you did it to one of the least of these My brethren, you did it to Me.’

41 “Then He will also say to those on the left hand, ‘Depart from Me, you cursed, into the everlasting fire prepared for the devil and his angels:

42 for I was hungry and you gave Me no food; I was thirsty and you gave Me no drink;

43 I was a stranger and you did not take Me in, naked and you did not clothe Me, sick and in prison and you did not visit Me.’

44 “Then they also will answer [d]Him, saying, ‘Lord, when did we see You hungry or thirsty or a stranger or naked or sick or in prison, and did not minister to You?’

45 Then He will answer them, saying, ‘Assuredly, I say to you, inasmuch as you did not do it to one of the least of these, you did not do it to Me.’

46 And these will go away into everlasting punishment, but the righteous into eternal life.”

Here is my response that…. got me banned from this guys Facebook. LOL:

I think you have a misconception as to who gives more time and money to the needy. Here for instance is a 28-minute interview (via my YT) with Arthur Brooks discussing his book, “Who Really Cares: The Surprising Truth about Compassionate Conservatism”

I include this in a larger post [on my site] discussing the free market and the wealth it affords people to help others (Capitalism, The Moral Choice | PragerU and More).

…However, conservatives gave about 30 percent more money per year to private charitable causes, even though his study found liberal families earned an average of 6 percent more per year in income than did conservative families. This greater generosity among conservative families proved to be true in Brooks’ research for every income group, “from poor to middle class to rich.”

This “giving gap” also extended beyond money to time donated to charitable causes, as well. Brooks also discovered that in 2002, conservative Americans were much more likely to donate blood each year than liberals and to do so more often within a year. Brooks found “if liberals and moderates gave blood at the same rate as conservatives, the blood supply in the United States would jump by about 45 percent.”

When Brooks compared his findings to IRS data on the percentage of household income given away, he found that “red” states in the 2004 election were more charitable than “blue” states. Brooks found that 24 of the 25 states that were above average in family charitable giving voted for Bush in 2004, and 17 of the 25 states below average in giving voted for Kerry. Brooks concluded, “The electoral map and the charity map are remarkably similar.”

Why? A clue may be found in the 1996 General Social Survey, which asked Americans whether they agreed that “the government has a responsibility to reduce income inequality.” People who “disagreed strongly” with that statement gave 12 times more money to charity per year than those who “agreed strongly” with the statement.

One’s values, beliefs and political philosophies seem to impact how much one shares of one’s own income with the less fortunate in society. Facts are often surprising and illuminating.

(BELIEF NET)

See also “GOING TO THE MAT’s” post:

So… adopting your premise [what I think is your premise], the opposite is true.

Response?

Censorship.

The go to by the left.

Big Government, Big Business, Big Problems

Published by Papa Giorgio

Since the start of the Covid crisis, the American economy has been turned on its head. Times are good for the big guys — Big Business and Big Government. But what about for the small business owner, the personification of the American dream? Carol Roth discusses Crony Corporatism/Capitalism and is the author of, “The War on Small Business: How the Government Used the Pandemic to Crush the Backbone of America“

UPDATED my “BAM! What Is Crony Capitalism“ with this Prager U video.

The Bizarre Refusal to Apply Cost-Benefit Analysis to COVID Debates

Published by Papa Giorgio

In virtually every aspect of public life, we make policy choices by comparing the cost and benefits of various policies. We often refuse to impose limits even though we know they would save lives: we could ban cars or make the speed limit 25 mph and save hundreds of thousands of lives. We don’t because we assess that the benefits of cars outweigh the costs of those deaths. Why do we still refuse to use this analysis for COVID?

Here is his article of which I excerpt a tiny position below: The Bizarre Refusal to Apply Cost-Benefit Analysis to COVID Debates

,,,,Social Cost Benefit Analysis [is] a decision support tool that measures and weighs various impacts of a project or policy. It compares project costs (capital and operating expenses) with a broad range of (social) impacts, e.g. travel time savings, travel costs, impacts on other modes, climate, safety, and the environment.

This framework, above all else, precludes an absolutist approach to rational policy-making. We never opt for a society-altering policy on the ground that “any lives saved make it imperative to embrace” precisely because such a primitive mindset ignores all the countervailing costs which this life-saving policy would generate (including, oftentimes, loss of life as well: banning planes, for instance, would save lives by preventing deaths from airplane crashes, but would also create its own new deaths by causing more people to drive cars)…..

The Myth Of American Inequality (Armstrong & Getty)

Published by Papa Giorgio

Armstrong and Getty read from and discuss a bit an article in the WALL STREET JOURNAL entitled: The Myth Of American Inequality. See more via my post titled, “Wealth Inequality in America – Critiques On Inequality” (The below video was the update to that post)

The article is originally found at the WALL STREET JOURNAL, titled:

  • The Truth About Income Inequality: The Census Fails To Account For Taxes And Most Welfare Payments, Painting A Distorted Picture.

Here is the non-paywall article via PECKFORD 42:

Taxes and transfers in the U.S. put its income distribution in line with its large developed peers.

America is the world’s most prosperous large country, but critics often attempt to tarnish that title by claiming income is distributed less equally in the U.S. than in other developed countries. These critics point to data from the Organization for Economic Cooperation and Development, which ranks the U.S. as the least equal of the seven largest developed countries. American progressives often weaponize statistics like these to urge greater redistribution. But the OECD income-distribution comparison is biased because the U.S. underreports its income transfers in comparison to other nations. When the data are adjusted to account for all government programs that transfer income, the U.S. is shown to have an income distribution that aligns closely with its peers.

The OECD measures inequality by determining a country’s “Gini coefficient,” or the proportion of all income that would have to be redistributed to achieve perfect equality. A nation’s Gini coefficient would be 0 if every household had the same amount of disposable income, and it would approach 1 if a single household had all of the disposable income. The current OECD comparison, portrayed by the blue bars in the nearby chart, shows Gini coefficients for the world’s most-developed large countries, ranging from 0.29 in Germany to 0.39 in the U.S.

But there are variations in how each nation reports income. The U.S. deviates significantly from the norm by excluding several large government transfers to low-income households. Inexplicably, the Census Bureau excludes Medicare and Medicaid, which redistribute more than $760 billion a year to the bottom 40% of American households. The data also exclude 93 other federal redistribution programs that annually transfer some $520 billion to low-income households. These include the Children’s Health Insurance Program, Temporary Assistance for Needy Families and the Special Supplemental Nutrition Program for Women, Infants and Children. States and localities directly fund another $310 billion in redistribution programs also excluded from the Census Bureau’s submission.

This means current OECD comparisons omit about $1.6 trillion in annual redistributions to low-income Americans—close to 80% of their total redistribution receipts. This significantly skews the U.S. Gini coefficient. The correct Gini should be 0.32—not 0.39. That puts the U.S. income distribution in the middle of the seven largest developed nations.

Gini scores for other countries in the OECD ranking also might shift with better data: The OECD doesn’t publish transfers by income level for other countries. But the change in income distribution for other countries would likely be less drastic. The poorest fifth of U.S. households receive 84.2% of their disposable income from taxpayer-funded transfers, and the second quintile gets 57.8%. U.S. transfer payments constitute 28.5% of Americans’ disposable income—almost double the 15% reported by the Census Bureau. That’s a bigger share than in all large developed countries other than France, which redistributes 33.1% of its disposable income.

The U.S. also has the most progressive income taxes of its peer group. The top 10% of U.S. households earn about 33.5% of all income, but they pay 45.1% of income taxes, including Social Security and Medicare taxes. Their share of all income-related taxes is 1.35 times as large as their share of income. In Germany, the top 10% pay 1.07 times their share of earnings. The top 10% of French pay 1.1 times their share.

If the top earners pay smaller shares of income taxes in other countries, everybody else pays more. The bottom 90% of German earners pay a share of their nation’s taxes on income 77% larger than that paid by the bottom 90% of Americans. The bottom 90% in France pay nearly double the share their American counterparts pay. Even in Sweden—the supposed progressive utopia—the top 10% of earners pay only 5.9% of gross domestic product in income-related taxes, 22% less than their American peers. The bottom 90% of Swedes pay 16.3% of GDP in taxes on income, 77% more than in the U.S.

Even these numbers understate how progressive the total tax burden is in America. The U.S. has no value-added tax and collects only 35.8% of all tax revenues from non-income-tax sources, the smallest share of any OECD country. Most developed countries have large VATs and collect a far larger share of their state revenue through regressive levies.

When all transfer payments and taxes are counted, the U.S. redistributes a larger share of its disposable income than any country other than France. Relative to the share of income they earn, the share of income taxes paid by America’s high earners is greater than the share of income taxes paid by their peers in any other OECD country. The progressive dream of an America with massive income redistribution and a highly progressive tax system has already come true. To make America even more like Europe, these dreamers will have to redefine middle-income Americans as “rich” and then double their taxes.